Reading the Tea Leaves, Part 2

February 21, 2013

“Prediction is very hard, especially about the future.”

–   Yogi Berra (attributed)

It’s not too hard, however, to predict the past, especially the recent past.  And in some cases, the recent past can give us some pretty good indications about what’s coming in the near future.  It’s not exactly going out on a limb to say that health care is changing; less clear is into what is it changing, and how quickly.  Consider a few recent examples that may give us a sense of what we face.

Utah Medicaid.  On January 1, 2013, Utah became the second state after Colorado to implement an accountable care organization (ACO) for its Medicaid enrollees.  (For now, CHIP is excluded.)  The state make global payments to one of four ACOs, which have relatively broad latitude in working with providers to incentivize lower cost and higher quality, including pay for performance and shared savings.  Currently, physicians are paid on a fee-for-service basis, but the plan it to move to other payment methods (e.g., capitation, bundled payments).

What is different between this ACO model and traditional Medicaid managed care?  One is the flexibility in how the capitated payments received by the ACOs are distributed to the various providers.  The other is the requirement that the annual growth rate in Medicaid expenditures is limited to the rate of growth of the state’s general fund.  Those ACOs that are unable to limit the rate of growth may lose share or not be renewed.

Oregon.  Oregon has implemented a version of ACOs for all enrollees in Medicaid, CHIP, and the state employee health plan.  Fifteen geographically-based coordinated care organizations (CCOs) have been created.  Each will have a global budget for all health services (initially medical and mental health, with dental to be added) for the patients they cover.  Again, they have flexibility in how those funds are disbursed, but each CCO will be required to demonstrate a reduction in the rate of healthcare spending growth and meet specified quality metrics.  Shifting care to lower cost settings and preventive care are anticipated to be important elements.

Massachusetts.  Since 2009, Blue Cross Blue Shield of Massachusetts has had the Alternative Quality Contract, a modified global payment model in which annual payments to medical groups are linked to a per member per month budget.  There is both up-side risk (shared savings for coming in under budget) and down-side risk (penalties for exceeding budget), as well as incentives for meeting quality targets.  In 2012, Boston Children’s Hospital and its affiliated provider practices joined the Alternative Quality Contract, making it the first pediatric-only ACO.

What can we learn from this?  First, some form of accountable care, with elements of financial risk for providers and incentives for quality, appear to be the dominant emerging payment model.  Second, although there has been more progress so far in adult care (because the earliest ACO experiments were in Medicare), pediatrics is not immune.  Finally, this is happening very quickly.  There is no reason to think that the public and private payers in Wisconsin are not going to learn from these other states and begin to implement local version of this before long.

For those of you who still find many of these concepts in payment innovation and care delivery redesign confusing, here is a fun video from the Kaiser Family Foundation that puts it in terms even Yogi Berra would understand.


When Clinicians Lead

February 14, 2013

When I assumed my role as CEO of Children’s Specialty Group, someone asked me if I was still going to be a doctor.  Aside from the old dictum “once a doctor, forever a doctor,” the question raises an interesting consideration.  It sometime feels as if being a clinician is antithetical to being a leader, that doctors and nurses care for patients, while administrators look after organizations (and often in an uncaring manner, at that).  According to an article I read recently, “When Clinicians Lead,” leadership by doctors and other providers is critical to the success of health care organizations and the medical system as a whole.  Yet there are important, albeit surmountable, barriers to greater involvement by clinicians in leadership roles.

The article cites a variety of evidence of the importance of clinical leadership.  Several studies have demonstrated an association between higher levels of clinician involvement in management and hospital performance.

So why is there a reluctance for clinicians to assume more leadership roles in hospitals and other health organizations?  The article mentions several.  Clinicians have a certain amount of skepticism about the value of administrative and other leadership activities, in contrast with the obvious value of direct patient-care activities.  Many physicians, accustomed to an evidence-based approach, find the “evidence” for leadership effectiveness to be insufficiently rigorous.  (I confess that I myself have a hard time with the average Harvard Business Review article’s largely anecdotal approach.)  Second, there are weak positive incentives and some disincentives to clinicians’ assuming leadership roles.  Especially in an academic setting, clinical leadership is rarely helpful in promotion or career advancement, and may take time away from more value-added professional activities.  Monetary compensation for administrative time may be less than that for clinical activities.  And a physician leader risks being seen as having “gone over to the dark side.”  All this for the promise of endless meetings, reports, etc.  Finally, leadership development opportunities tend to be sparse for clinicians, leading many to believe (correctly or not) that they are unprepared for such roles.

If we are to do more to encourage clinicians to assume leadership roles – and I would argue that we need to do exactly that – we need to address these barriers.  Within CSG, our Professional Development Committee is working to identify leadership development resources available both internally and externally, and we hope to invest some funding to support such activities for individuals who are willing to take on leadership roles.  But no amount of training is going to do much if people are unwilling to participate, so let me address the skepticism.  I can tell you that personally, I have found administrative leadership to be as rewarding as the clinical work I continue to do.  As a doctor I impact one patient and family at a time; as a leader, my reach can be much broader.  It is also important to recall that leadership comes in many forms.  At one level are the institutional leaders, those with formal titles, and whose leadership is largely in the administrative realm.  Next are service leaders – such as medical directors, or committee chairs – individuals with a more localized focus on a specific area.  Finally, there are the frontline leaders, many without any formal title, but the ones everyone knows to go to when something needs to get done.  The time commitments, required skill sets, and duties obviously vary tremendously.  But all of these roles are crucial, and all are best filled by the doctors and other providers who are at the core of what we do.


Do Physicians Care About Money?

February 1, 2013

It goes by several names: “pay for performance” (a.k.a. “P4P”), “value-based purchasing.”  The concept is that rather than paying for health care based solely on the volume of services performed, payment is based at least in part on some measurable result, with a goal of increasing quality and decreasing cost (i.e., greater value).  In one of the more ambitious P4P initiatives to date, New York City recently announced that 2.5% of the pay for the 3300 physicians employed at the city’s 11 public hospitals will be based on achieving certain quality metrics.  CSG has P4P programs with both our commercial and government payers; we even have one with our own employee health plan.

There are many aspects of P4P that appear to affect its effectiveness and acceptability.  But recently, there has been a debate about whether physicians even respond to financial incentives.  Both skeptics and supporters of P4P can find evidence to support their view, as results of research have been mixed. Yet can it be true that physicians are actually above all that, that our motives are too pure for our practice to be affected by money?  In a New York Times op-ed about the NYC P4P proposal, Bill Keller argues essentially that.  Many of the posted comments about the piece are from physicians, who argue that they are not affected by financial considerations, and would practice high-quality medicine if administrators and payers would simply get out of the way.  One commenter noted that not only do incentives not work, but if P4P leads to lower salaries, there will be fewer individuals choosing to go into the affected specialties.  Hmmm.  If physicians choose a specialty at least in part based on compensation, that seems to me a way of responding to financial incentive!

Indeed, there is evidence that we are just like everyone else in that we do change our practice in response to monetary considerations.  Lowenstein et al. provide several examples, including increased administration of higher cost drugs by oncologists who are reimbursed for them, and changes in rates of procedures depending on whether payment is fee-for-service or capitated.  But it really is complex, in that the decisions of physicians, as for most professionals, are driven not only by financial but by numerous other considerations.  Both Lowenstein and Cassel argue that money, while a factor, is not the most important one.  Fidelity to the patient, professional pride, and competitiveness are also key drivers.

Whether we like it or not, some form of P4P will be an increasing part of our future.  But that doesn’t have to be threatening.  We could fight against the very idea that we can be swayed by financial incentives.  Or we can be part of figuring out how to make it work – defining the right incentives, both monetary and non-monetary, and the outcomes to be achieved – so that our patients will get the best quality at the lowest cost.  That will help us preserve both patient value and our professional values.


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